A significant development was announced this week by the companies involved in the project to bring natural gas from Alaska’s North Slope to market. The companies involved selected Nikiski as the lead site for a natural gas liquefaction plant and terminal.
The news is a big deal for Alaska, which has been trying to figure out how to get its natural gas to market for decades. According to senior project manager Steve Butt, acquiring the land on which to build an LNG plant is a necessary step in applying for an export license, which is needed to keep the project moving forward.
It’s also a big deal for the Kenai Peninsula, where such a project would provide a cornerstone for the local economy for decades to come.
ExxonMobil, BP, ConocoPhillips and TransCanada, the companies involved in the effort, noted a number of factors that make Nikiski a favorable location, including already exisiting infrastructure, land available that can accommodate the facility, as well as a pipeline route from the North Slope that would provide access to in-state users in Alaska’s major population centers.
Of course, it’s one thing to move a project forward on paper, and another to start moving dirt. In an interview with the Clarion, Butt compared the progress on the project to running a hurdle race on the track. You don’t want to start running the race until you’re confident you can clear all the hurdles, not just the first few. With the lead site for the LNG plant selected, engineers will continue to develop the plan to eliminate as much uncertainty as possible.
Butt noted a number of hurdles still need to be cleared, not the least of which is what the industry refers to as a competitive, predictable and durable oil and gas fiscal environment. In other words, the companies involved in the project would like to see the Legislature come up with a tax structure that they feel is workable for the long run. Other issues, from engineering to permitting, still need to be resolved as well.
However, land acquisition is a tangible step forward — and certainly much further along in the process than any previous gas pipeline effort has gone. We’re glad to see the project make that step, and we’re thrilled that the Kenai Peninsula has an opportunity to be a part of it.